Revisions to Form ADV

As we previously summarized in September 2016, the SEC has adopted changes to Form ADV, the filing required to be made by nearly all SEC and state-registered investment advisers. These revisions went into effect on October 1, 2017.

Among other changes, the updated Form ADV places significant additional reporting requirements on investment advisers who manage separate accounts. Separate account advisers are now required to report aggregated information about their separate account clients, including the types of assets the separate accounts hold and their exposure to derivatives and leverage. Separate account advisers with December 31 year-ends are encouraged to start compiling this information now so that it is ready for the advisers’ annual Form ADV amendment in March 2018. If an adviser needs to file an other-than-annual amendment prior to its March 2018 annual amendment and is unable to answer any of the new questions in Item 5, the SEC has advised it is acceptable for the adviser to use a placeholder of “0” and note in the Miscellaneous section of Schedule D that a placeholder was used.

Additionally, the SEC’s Form ADV FAQ has recently been updated in connection with the revised Form ADV. The updated FAQ includes additional guidance on answering Form ADV questions related to social media accounts, counting separately managed accounts, and other items. We encourage all clients to review the FAQ when completing its Form ADV.